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August 17, 2005

WTO finds U.S. wrong in EU steel subsidy dispute

by Sam Savage

GENEVA (Reuters) - World Trade Organization (WTO) experts
ruled against the United States on Wednesday in a long-running
row with the European Union over special U.S. duties on carbon
steel products from Britain and Spain.

The three-man team also recommended that the 148-nation
WTO's Dispute Settlement Body call on Washington to come into
line over the issue.

The experts, sitting as a compliance panel, found that U.S.
amendments to the way Washington applied the duties to British
and Spanish products after losing an earlier case brought by
the EU did not comply fully with WTO rules.

But they found that the U.S. methods of assessing new
duties on carbon steel flat products from France were in order.

The Office of the United States Trade Representative
contended later on Wednesday that the ruling was at worst a
mixed result for the United States.

"The findings of the panel are mixed, though largely
favorable to the United States," said USTR press secretary
Neena Moorjani.

"The Panel rejected the majority of the EC's claims that
the United States failed to comply with the DSB's ruling and
recommendations. The Panel did find that Commerce should have
taken more evidence into account in two of its
redeterminations," she added, saying both the United States and
the EU had the option of appealing the result.

The case dates back to when the EU challenged the United
States in the WTO over duties Washington imposed on carbon
steel goods to make up for what it argued were effective
continuing subsidies to former state-owned steel firms in
Europe.

A dispute panel and appeals judges in 2002 and 2003 found
largely in favor of the EU complaint, which was backed by
Brazil, and U.S. officials said they would implement the
recommended changes.

But last year Brussels said changes in the application of
the U.S. duties still violated WTO rules -- and won agreement
from other WTO members to set up the compliance panel.